Ride-service companies continue operations despite lawsuit

Festooned with the company's signature pink mustache, a Lyft car makes its way downtown.

Festooned with the company's signature pink mustache, a Lyft car makes its way downtown.

Photo: Bob Owen / San Antonio Express-News

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On Yong Theus a driver with LYFT, sets her GPS on her phone for directions during a fare. LYFT drivers use their own cars to drive passengers as a taxi would. Theus has decorated her car with a disco theme which was her daughter's idea. Thursday, March 27, 2014. less

On Yong Theus a driver with LYFT, sets her GPS on her phone for directions during a fare. LYFT drivers use their own cars to drive passengers as a taxi would. Theus has decorated her car with a disco theme ... more

Photo: San Antonio Express-News

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VIA Board member Dr. Richard Gambitta, far left, listens to James Alton, left to right, John Smatlak and Harry Burt all of Interfleet Technology, as they present a proposed look at what VIA street cars could look like. Thursday, March 27, 2014. less

VIA Board member Dr. Richard Gambitta, far left, listens to James Alton, left to right, John Smatlak and Harry Burt all of Interfleet Technology, as they present a proposed look at what VIA street cars could ... more

Photo: San Antonio Express-News

Ride-service companies continue operations despite lawsuit

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SAN ANTONIO — Despite a federal lawsuit filed by the taxi and limo industry last week that seeks to stop ride-sharing companies from operating in San Antonio and Houston, the online-based services Lyft and Uber continue to pick up people for rides in both cities.

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The 23 plaintiffs that filed the lawsuit April 8 — among them, two taxi companies from San Antonio including the city's largest, Yellow Cab San Antonio — have asked a federal judge to rule the companies are violating vehicle-for-hire ordinances in San Antonio and Houston. They are also seeking a temporary restraining order and injunction to prevent Lyft and Uber from operating.

But an injunction has not yet been issued. A hearing on the matter could be scheduled soon, said Michael A. Harris, one of two Houston-based attorneys representing the plaintiffs.

A pre-trial conference has been scheduled for July 18 in U.S. District Court in Houston.

In the meantime, Lyft and Uber have worked around the city rules by not charging for their service. San Antonio police have said a violation of the vehicle-for-hire ordinance occurs when a financial transaction takes place. Katie Dally, with Lyft, said none of her company's drivers have received citations.

But in Houston on Tuesday, Uber spokeswoman Nairi Hourdajian confirmed that the company is charging Houston passengers for the service and will “stand by” any drivers should police cite them. Already, more than two dozen citations have been issued against Lyft and Uber in Houston for accepting payment.

In response to questions about the decision to charge in Houston, Uber spokeswoman Lauren Altmin said the free service in San Antonio “remains ongoing at this time.”

Lyft and Uber connect drivers, who are not licensed by the city to work as taxi drivers, with passengers looking for a quick ride via smartphone apps. The companies have billed themselves as tech or ride-sharing services, but taxi and limo drivers say they are providing a form of transportation and should meet the same regulations as the cab industry.

The federal lawsuit also questions the companies' levels of insurance coverage and their compliance with city-required background checks.

“So given the public safety issue at risk here, we're going to ask the court to come in and protect the common welfare and do what these laws were designed to do in the first place,” Harris said.

Both Lyft and Uber are undeterred.

“This lawsuit is clearly an attempt by the same taxi industry that has failed consumers, drivers and the city of San Antonio for decades,” Leandre Johns, general manager of Uber in San Antonio.

“Lyft fills an economic and transportation need for both drivers and passengers in San Antonio, and we will continue to provide safe, reliable rides that benefit the local community and further public safety,” Dally wrote in an email.

Lyft, followed by Uber, launched in San Antonio in late March, about a month after they started service in Houston. Within days of Lyft's Alamo City kickoff, San Antonio Police Chief William McManus issued a cease-and-desist letter, informing company representatives they were in violation of the city's vehicle-for-hire ordinance.

Two days later, Mayor Julián Castro announced he was open to modifying the existing ordinance to accommodate the companies.

The following week, McManus told members of the City Council Public Safety Committee that he would return with more information about how other cities have dealt with the companies in 30 days.

But SAPD Sgt. Javier Salazar confirmed that eight copies of the cease-and-desist letter have been sent “as fair warning” to registered owners of vehicles working for the ride-sharing companies that were reported to police as violating the city's vehicle-for-hire ordinance.